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Abu Dhabi set to buy nine percent share in AMD

AMD is poised to sell 9 percent of itself to investors from Abu Dhabi in a …

It's no secret that AMD has been in lousy financial shape this year. The company's cash reserves have been badly depleted by both the cost of acquiring ATI and the impact of multiple quarters in the red. As a result, AMD is planning to sell 9 percent of itself to investors from Abu Dhabi at a cost of approximately $700 million.

As MSNBC's Financial Timesreports, the deal isn't signed yet and could be subject to restrictions if the US Committee on Foreign Investment decides the sale would compromise national security in any way, shape, or fashion. AMD hasn't said exactly what it would use the additional cash flow for if the deal goes through, but listed debt reduction, boosted working capital, acquisitions, or increased capital spending as various areas where it might choose to spend its new-found income. AMD has stated (via an SEC filing) that it might face future cash flow problems if revenue does not increase in 2008 and the Abu Dhabi purchase doesn't go through—the company's current actions are doubtlessly aimed at staving off such an occurrence.